Correlation Between ICICI Bank and Bendigo
Can any of the company-specific risk be diversified away by investing in both ICICI Bank and Bendigo at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ICICI Bank and Bendigo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ICICI Bank Limited and Bendigo and Adelaide, you can compare the effects of market volatilities on ICICI Bank and Bendigo and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in ICICI Bank with a short position of Bendigo. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICICI Bank and Bendigo.
Diversification Opportunities for ICICI Bank and Bendigo
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ICICI and Bendigo is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ICICI Bank Limited and Bendigo and Adelaide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bendigo and Adelaide and ICICI Bank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on ICICI Bank Limited are associated (or correlated) with Bendigo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bendigo and Adelaide has no effect on the direction of ICICI Bank i.e., ICICI Bank and Bendigo go up and down completely randomly.
Pair Corralation between ICICI Bank and Bendigo
If you would invest 2,596 in ICICI Bank Limited on January 30, 2024 and sell it today you would earn a total of 57.00 from holding ICICI Bank Limited or generate 2.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 95.45% |
Values | Daily Returns |
ICICI Bank Limited vs. Bendigo and Adelaide
Performance |
Timeline |
ICICI Bank Limited |
Bendigo and Adelaide |
ICICI Bank and Bendigo Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ICICI Bank and Bendigo
The main advantage of trading using opposite ICICI Bank and Bendigo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICICI Bank position performs unexpectedly, Bendigo can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bendigo will offset losses from the drop in Bendigo's long position.ICICI Bank vs. HMN Financial | ICICI Bank vs. Community West Bancshares | ICICI Bank vs. First Financial Northwest | ICICI Bank vs. Ponce Financial Group |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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